Customer Segmentation
The Who, What, Where’s, and Why’s of Business SmartS
Deciding to launch an ecommerce business meant you were interested in selling right? Not being a statistician. By now it’s likely you’ve come to terms with the need to crunch numbers pretty much all the time. Whether it’s inventory, revenues, or shipping costs, internet-based vendors find themselves in front of a spreadsheet and a calculator as frequently as they are in an image editing app or a web development tool.
That softens the blow of what we’re about to discuss. As long as you’re dealing with digits, start examining the core of your business by figuring out who buys what, and how often. In the trade, it’s referred to as “customer segmentation,” and it is a critical way to make your store thrive.
Customer segmentation works best when you pin down stats and demographic data from the top 20 percent of sales. Not of customers, of sales. If you have repeat customers, that’s great, but if their volume of purchases is not especially high, it’s not a helpful measure for future performance and growing a consumer base. We all know about customer conversion, or turning lookers into buyers. The conversion rate among all ecommerce sectors in 2022 was 3.65 percent.
Studying the shared attributes of those buying across your site will guide you toward marketing more prospective customers. And unlike other strategies for growth, it can happen quickly.
Targeted marketing in the 2020 decade is about as easy as it gets. Social media platforms are practically designed for this. Facebook (Meta), for example, provides an easy breakdown of the basics – age, location, ideology – but increasingly it allows businesses to gather data about their interests based on company sites and pages they have visited. With this knowledge in hand, your task is to match your product mix with those most likely to be intrigued.
Facebook Ad Analytics Guide is one tool to help you dive into the art and science of zeroing in on potential customers. Its data reach is admirable: available are customer-reported statistics such as income, buying habits, buying likelihood, and other measures useful in figuring out who may be receptive to outreach.
Kick off your segmentation efforts with these basics:
Age. It’s probably the easiest gauge of product interest.
Gender. Though it’s obviously becoming more fluid, it’s still an excellent measure.
Cart abandonment. This tells you how close you came to making a sale. Don’t ignore it.
First-time shoppers. These future buyers could be an easy catch.
Grow your business in a hyper-competitive environment by determining who is most likely to buy from you. It sounds simple, but perhaps is something you’ve put off. Until now.